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Question 1 (a) MICRO Co is a young start-up company. It will not be paying...

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Question 1 (a) MICRO Co is a young start-up company. It will not be paying dividends in the next 9 years. It will start paying dividends of RM8 per share on the 10 year and increase it by 6% per annum, indefinitely. The required rate of return on the equity on this stock is 15%. Required: Calculate the current price of the stock. (5 marks) (b) A firm has a required return on shares of 18%. Its current dividend is RM4.00 per share. Dividends are expected to grow by 20% in year 1, by 10% in year 2, and by 9% per annum from Year 3 onwards. Required: Calculate the current share price. (7 marks)

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